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VLADIVOSTOK, Russia (Reuters) – President Vladimir Putin said on Thursday that Russia would produce missiles that were banned under a landmark Cold-War era nuclear pact that ended last month, but that Moscow would not deploy them unless the United States did so first.

Speaking at an economic forum in Russia’s Far East, Putin said Moscow had urged the United States to de-escalate a spiraling arms race between the former Cold War foes, but that Washington had not responded.

The Russian leader said he was concerned by U.S. talk of deploying missiles in Japan and South Korea, a deployment he said would cover parts of Russian territory.

Tensions over nuclear arms control have been rising after Washington formally pulled out of the Intermediate-Range Nuclear Forces Treaty (INF) pact last month accusing Russia of violating it, allegations Moscow denied.

Last month the United States tested a conventionally-configured cruise missile that hit a target more than 500 km away, a test that would have been prohibited under the INF.

The pact banned land-based missiles with a range of 310-3,400 miles, reducing the ability of both countries to launch a nuclear strike at short notice.

“…Of course we will produce such missiles,” Putin told an economic forum in the Russian city of Vladivostok. He repeated a pledge by Moscow not to deploy any new missiles unless the United States does so first.

“We are not happy about the fact that the head of the Pentagon said that the United States intends to deploy them in Japan and South Korea, this saddens us and is a cause for certain concern,” Putin said.

Putin said he offered U.S. President Donald Trump in a recent phone call the chance to buy one of the hypersonic nuclear weapons Moscow is developing. He said Trump spurned the offer and replied that Washington was making its own.

Putin said he feared that an arms race could spread into space and that Washington could develop a new space weapon.

MOSCOW (Reuters) – Russia and China accused the United States on Tuesday of stoking military tensions by testing a ground-launched cruise missile, but the foreign ministry in Moscow said it would not be drawn into an arms race.

The Pentagon said on Monday it had tested a conventionally-configured cruise missile that hit its target after more than 500 km (310 miles) of flight, its first such test since the demise of a landmark nuclear pact this month.

The United States formally withdrew from the Cold War-era Intermediate-Range Nuclear Forces Treaty (INF) with Russia on Aug. 2 after accusing Moscow of violating it, a charge dismissed by the Kremlin.

The text would have been banned under the INF, which prohibited land-based missiles with a range of between 310 and 3,400 miles, reducing the ability of both countries to launch a nuclear strike at short notice.

Washington had “obviously taken the course of escalating military tensions,” Russian Deputy Foreign Minister Sergei Ryabkov said

Russia would, however, not allow itself “to be pulled into a costly arms race” and did not plan to deploy new missiles unless the United States did so first, he was quoted as saying by TASS news agency.

The Kremlin said the U.S. missile test showed that Washington had long been preparing to exit the nuclear pact.

“It is simply not possible to prepare for such tests in a few weeks or a few months. This …shows that it was not Russia, but the United States with its actions that brought the breakdown of the INF,” Kremlin spokesman Dmitry Peskov said.

China also expressed concern.

In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said the test showed the United States was stoking a new arms race and confrontation, which would have a serious negative impact on regional and global security.

“We advise the U.S. side to abandon outdated notions of Cold War thinking and zero-sum games, and exercise restraint in developing arms,” Geng told a daily news briefing.

(Reporting by Maria Kiselyova; Additional reporting by Ben Blanchard in BEIJING; Writing by Tom Balmforth; Editing by Andrew Heavens and John Stonestreet)

SEOUL (Reuters) – Any move by the United States to place new ground-launched, intermediate-range missiles in South Korea could spark a “new Cold War” and an escalating arms race in the region, North Korean state media said on Wednesday.

U.S. Defense Secretary Mark Esper this month said he was in favor of placing ground-launched, intermediate-range missiles in Asia, a day after the United States withdrew from the Intermediate Nuclear Forces (INF) treaty with Russia.

“The U.S. pointed out that it is now examining a plan for deploying ground-to-ground medium-range missiles in the Asian region and South Korea has been singled out as a place for the deployment,” North Korea’s state news agency KCNA said.

“It is a reckless act of escalating regional tension, an act that may spark off a new Cold War and arms race in the Far Eastern region to deploy a new offensive weapon in South Korea,” it said in a commentary.

Other senior U.S. officials have said any deployment of such weaponry would be years away.

South Korea’s defense ministry has said there had been no discussion of placing American intermediate-range missiles in the country, and there were no plans to consider the idea.

The KCNA statement also criticized recent moves to improve military sites in South that host U.S. Terminal High Altitude Area Defense (THAAD) systems, which are designed to intercept ballistic missiles.

“It is a hard fact that the deployment of THAAD is pursuant to the U.S. strategy to contain great powers and hold supremacy in Northeast Asia, not the one for ‘shielding’ South Korea from someone’s ‘threat’,” KCNA said.

North Korea’s military has launched a series of missiles in recent weeks to protest what it sees as a military build-up in South Korea, as well as joint military exercises by South Korean and American troops stationed on the peninsula.

The launches have complicated attempts to restart talks between U.S. and North Korean negotiators over the future of the country’s nuclear weapons and ballistic missile programs, which prompted sanctions by the United Nations Security Council.

MOSCOW (Reuters) – Russian state television has listed U.S. military facilities that Moscow would target in the event of a nuclear strike, and said that a hypersonic missile Russia is developing would be able to hit them in less than five minutes.

The targets included the Pentagon and the presidential retreat in Camp David, Maryland.

The report, unusual even by the sometimes bellicose standards of Russian state TV, was broadcast on Sunday evening, days after President Vladimir Putin said Moscow was militarily ready for a “Cuban Missile”-style crisis if the United States wanted one.

With tensions rising over Russian fears that the United States might deploy intermediate-range nuclear missiles in Europe as a Cold War-era arms-control treaty unravels, Putin has said Russia would be forced to respond by placing hypersonic nuclear missiles on submarines near U.S. waters.

The United States says it has no immediate plans to deploy such missiles in Europe and has dismissed Putin’s warnings as disingenuous propaganda. It does not currently have ground-based intermediate-range nuclear missiles that it could place in Europe.

However, its decision to quit the 1987 Intermediate-range Nuclear Forces (INF) Treaty over an alleged Russian violation, something Moscow denies, has freed it to start developing and deploying such missiles.

Putin has said Russia does not want a new arms race but has also dialed up his military rhetoric.

Some analysts have seen his approach as a tactic to try to re-engage the United States in talks about the strategic balance between the two powers, something Moscow has long pushed for, with mixed results.

In the Sunday evening broadcast, Dmitry Kiselyov, presenter of Russia’s main weekly TV news show ‘Vesti Nedeli’, showed a map of the United States and identified several targets he said Moscow would want to hit in the event of a nuclear war.

The targets, which Kiselyov described as U.S. presidential or military command centers, also included Fort Ritchie, a military training center in Maryland closed in 1998, McClellan, a U.S. Air Force base in California closed in 2001, and Jim Creek, a naval communications base in Washington state.

Kiselyov, who is close to the Kremlin, said the “Tsirkon” (‘Zircon’) hypersonic missile that Russia is developing could hit the targets in less than five minutes if launched from Russian submarines.

Hypersonic flight is generally taken to mean traveling through the atmosphere at more than five times the speed of sound.

“For now, we’re not threatening anyone, but if such a deployment takes place, our response will be instant,” he said.

Kiselyov is one of the main conduits of state television&rsquo;s strongly anti-American tone, once saying Moscow could turn the United States into radioactive ash.

Asked to comment on Kiselyov’s report, the Kremlin said on Monday it did not interfere in state TV’s editorial policy.

MOSCOW (Reuters) – With his ratings down and state funds needed to hedge against new Western sanctions and raise living standards, Russian President Vladimir Putin cannot afford to get sucked into a costly nuclear arms race with the United States.

Alleging Russian violations, Washington said this month it was suspending its obligations under the Intermediate-range Nuclear Forces Treaty (INF) and starting the process of quitting it, untying its hands to develop new missiles.

That raises the prospect of a new arms race between Washington and Moscow, which denies flouting the treaty. Putin responded by saying Russia would mirror the U.S. moves by suspending its own obligations and quitting the pact.

But Putin, who has sometimes used bellicose rhetoric to talk up Russia’s standoff with the West and to rally Russians round the flag, did not up the ante.

He did not announce new missile deployments, said money for new systems must come from existing budget funds and declared that Moscow would not deploy new land-based missiles in Europe or elsewhere unless Washington did so first.

“…We must not and will not let ourselves be drawn into an expensive arms race,” Putin told Defence Minister Sergei Shoigu.

His statement was borne of necessity.

Harsh economic and political realities and memories of how the cost of the Cold War arms race contributed to the Soviet Union’s demise means Putin’s options are limited, a situation that may curb his appetite for expensive escalation in future.

“We need to keep in mind that the question of an arms race that could cut us into pieces is entirely realistic,” Sergei Dubinin, former governor of Russia’s central bank, told Russia’s RBC TV channel before Washington announced its exit.

He said the United States was trying to repeat its successful Cold War strategy of pushing Moscow into an arms race it could not afford and that Russia would be ill-advised to try to attain parity and needed a smart response instead.

Memories of empty supermarket shelves in the run-up to the 1991 Soviet collapse still haunt many older Russians as the then Soviet Union directed huge cash flows to the military-industrial complex to try to keep up with the United States while neglecting the consumer economy.

“They (the Americans) recall that the Soviet Union collapsed in part because it tried to keep up with the United States when it came to who produced more missiles, nuclear submarines and tanks,” Viktor Litovkin, a military expert, told the Russian army’s Zvezda TV channel.

“They are trying to do the same thing today.”

COUNTING THE COSTS

With the INF treaty suspended, Washington and Moscow have said they will develop previously prohibited short- and intermediate-range land-based missiles, with Russia saying it wants them ready by 2021.

Shoigu told Putin the money to develop two new land-based missile launchers would come from this year’s budget by reallocating existing funds.

Russia does not disclose the full extent of its military and national security spending, but says it will account for around 30 percent of its 18-trillion-rouble ($273-billion) budget this year.

Oil revenues mean Russia is not short of money. Its budget surplus this year is projected to be 1.932 trillion rubles ($29.3 billion) or 1.8 percent of gross domestic product. Russia’s foreign exchange reserves stand at $478 billion, the fifth largest in the world.

But the money is already allocated in a way dictated by Moscow’s difficult geopolitical situation and by Putin’s own increasingly tricky domestic political landscape. Reallocating the money would be painful.

Moscow is hoarding cash to try to give itself a $200-billion buffer against new Western sanctions and is embarking on a multi-billion dollar spending push to try to overhaul the country’s creaky infrastructure and raise living standards.

With signs of rising discontent over years of falling real incomes, rising prices, an increase in value-added tax and an unpopular plan to raise the pension age, Putin is under pressure to deliver.

Igor Nikolaev, director of auditor FBK’s Strategic Analysis Institute, said Putin might have to take money from other parts of the budget to fund a new arms race which would force him to scale back social spending plans or dip into the national wealth fund to top up the budget.

If a burgeoning arms race intensified, such a scenario would become more likely and Putin would be reluctant to spend more on defense in the current political climate, he said.

“It would not be desirable, especially as we know what’s happening with real incomes and that there are problems with his rating,” said Nikolaev. “Cutting spending on national projects would receive a mixed reaction.”

Though re-elected last year until 2024, and therefore not under immediate political pressure, Putin’s trust rating has fallen to a 13-year low. A poll this month showed the number of Russians who believe their country is going in the wrong direction hit its highest level since 2006.

Putin’s symmetrical response to Washington, which involves developing new missiles, has already angered some Russians.

“Are new arms a source of joy?” wrote blogger Vladimir Akimov, saying the money would be better spent on lifting people out of poverty. “Why not begin by repairing the roads and knocking down the wooden shacks (that people live in) across the country.”

GENEVA (Reuters) – The United States voiced deep suspicion on Tuesday over Russia’s pursuit of new space weapons, including a mobile laser system to destroy satellites in space, and the launch of a new inspector satellite which was acting in an “abnormal” way.

Russia’s pursuit of counterspace capabilities was “disturbing”, Yleem D.S. Poblete, U.S. Assistant Secretary of State for Arms Control, Verification, and Compliance, told the U.N.’s Conference on Disarmament which is discussing a new treaty to prevent an arms race in outer space.

A Russian delegate at the conference dismissed Poblete’s remarks as unfounded and slanderous.

Russian Foreign Minister Sergei Lavrov, at the Geneva forum in February, said a priority was to prevent an arms race in outer space, in line with Russia’s joint draft treaty with China presented a decade ago.

But Russian President Vladimir Putin unveiled in March “six new major offensive weapons systems”, including the Peresvet military mobile laser system, Poblete said.

“To the United States this is yet further proof that the Russian actions do not match their words,” she said.

Referring to a “space apparatus inspector”, whose deployment was announced by the Russian defense ministry last October, Poblete said: “The only certainty we have is that this system has been ‘placed in orbit’.”

She said its behavior on-orbit was inconsistent with anything seen before, including other Russian inspection satellite activities, adding: “We are concerned with what appears to be very abnormal behavior by a declared ‘space apparatus inspector’.”

Russia’s pursuit of counterspace capabilities “is disturbing given the recent pattern of Russian malign behavior,” she said, and its proposed treaty would not prohibit such activity, nor the testing or stockpiling of anti-satellite weapons capabilities.

Alexander Deyneko, a senior Russian diplomat in Geneva, dismissed what he called “the same unfounded, slanderous accusations based on suspicions, on suppositions and so on”.

The United States had not proposed amendments to the Sino-Russian draft treaty, he said.

“We are seeing that the American side are raising their serious concerns about Russia, so you would think they ought to be the first to support the Russian initiative. They should be active in working to develop a treaty that would 100 percent satisfy the security interests of the American people,” he said.

“But they have not made this constructive contribution,” he said.

China’s disarmament ambassador Fu Cong called for substantive discussions on outer space, leading to negotiations.

“China has always stood for peaceful use of outer space and we are against weaponization of outer space, an arms race in outer space, or even more turning outer space into a battle field,” he said.

MOSCOW/WASHINGTON (Reuters) – Donald Trump and Vladimir Putin will sit down in a room together in the Finnish capital on July 16 for their first summit meeting.

The U.S. president’s spontaneous approach to negotiations, and the inscrutable style of the Kremlin leader, make predicting the outcome of the summit with any accuracy close to impossible.

We do however, have a reasonable idea of the issues the two leaders and their aides will have mapped out before the meeting: the areas where they each want something from their counterpart, and the places they are willing to give ground.

Below are the issues likely to figure:

ARMS RACE RHETORIC

Both Trump and Putin have been using bellicose rhetoric about their nuclear arsenals, drawing their countries closer to a new arms race. Trump has said the U.S. nuclear capability needs renewing. He told Reuters last year, “if countries are going to have nukes, we’re going to be at the top of the pack.” Putin in March this year unveiled an array of new nuclear weapons, and warned Western governments “now they need to take account of a new reality.” An arms race would be dangerous and expensive for both sides. An agreement to scale back the rhetoric would be a win for both Putin and Trump. Progress towards extending the New Start arms treaty, which expires in 2021, would give substance to that agreement.

SANCTIONS RELIEF

Putin would like Trump to soften sanctions that Washington imposed over the annexation of Ukraine’s Crimea region and backing for separatists in eastern Ukraine, involvement in the Syrian civil war and allegations of Russian meddling in the U.S. elections in 2016. While a 2017 law bars Trump from easing many sanctions without Congress’ approval, he can offer some relief without a nod from Congress. The Republican president, who did not want to sign the law and has missed several deadlines for imposing sanctions included in it, could send a signal that the administration does not plan to expand the list of Russian firms and individuals subject to economic and travel restrictions. That would unfreeze much-needed investment and lending from international investors who, at the moment, are reluctant to commit to Russia for fear of the sanctions’ impact.

SYRIAN DEAL

Washington ally Israel is anxious that, with the conflict in Syria entering its end game, Iranian and Iran-backed forces will be left gathered around Israel’s borders. At the summit, Trump may ask Putin, the most powerful outside player in Syria since Russia’s military intervention there, to use his influence with Tehran to curb Iran’s military presence. This would be tough to deliver for Putin: it would risk a rupture with his allies in Tehran, and could leave Russian forces having to do the lion’s share of the remaining fighting in Syria, a burden that Moscow does not want to shoulder.

DIPLOMATIC TIT-FOR-TAT

Russia’s diplomatic presence in the United States, and the U.S. missions in Russia, are depleted after two rounds of tit-for-tat diplomatic expulsions in the past two years. The first was over alleged Russian meddling in the U.S. election, and the second, this year, was in response to the poisoning in England of former Russian spy Sergei Skripal and his daughter. Putin and Trump could agree in Helsinki to restore the full complement of diplomatic staff. That would not change the substance of the U.S.-Russia relationship, but it would be a symbol of a new start.

RUSSIA’S BACKYARD

Since Russia’s annexation of Crimea in 2014, the NATO alliance has stepped up military exercises in eastern Europe. The aim, according to NATO leaders, is to reassure alliance members who fear a Russian incursion. That has angered Russia. It says NATO is bearing down on its backyard. The Kremlin has likened it to Russia stationing missiles in Mexico. If Trump scaled back the exercises, that would be a big win for Putin. Two senior NATO diplomats told Reuters they are prepared for a worst-case scenario that Trump would announce a freeze on U.S. military exercises or withdraw troops from the Baltics in a gesture to Putin. At the NATO summit in Brussels that precedes Helsinki, NATO states will seek Trump’s assurances that he will stand firm on the exercises.

UKRAINIAN ALLY

Washington has stood by Ukraine’s pro-Western leaders in their stand-off with Russia. That has included the United States providing Kiev with hundreds of millions of dollars worth of military aid. Helsinki would be a triumph for Putin if he persuaded Trump to drop that military aid. Ukrainian officials say they have assurances from Trump aides he won’t do this, but acknowledge anything can happen when Trump and Putin are in a room together. In return, the Russian leader could make concessions over eastern Ukraine, where pro-Moscow separatists control swathes of territory. Diplomats say there is a deal to be done allowing armed international peacekeepers to patrol the area. However, Putin will not contemplate any concessions over Crimea.

OSLO (Reuters) – Russia vowed on Thursday to retaliate for a plan by Norway to more than double the number of U.S. Marines stationed there.

Oslo announced on Tuesday that it would ask the United States, its NATO ally, to send 700 Marines to train in Norway from 2019, against 330 at present, and said the additional troops would be based closer to the Russian border.

“This makes Norway less predictable and could cause growing tensions, triggering an arms race and destabilizing the situation in northern Europe,” the Russian Embassy said in a statement on its Facebook page.

“We see it as clearly unfriendly, and it will not remain free of consequence.”

Oslo has grown increasingly concerned about Russia since Moscow annexed of Crimea from Ukraine in 2014, while adding that it does not regard its much larger neighbor as a direct threat.

The U.S. Marines were scheduled to leave at the end of this year after an initial contingent arrived in January 2017 to train for winter conditions. They are the first foreign troops to be stationed in Norway since World War Two.

The initial decision to welcome the Marines had prompted Moscow to say it would worsen bilateral relations and escalate tensions on NATO’s northern flank.

On Wednesday, Russia’s Northern Fleet launched a large naval exercise in the Arctic Barents Sea. Later this year, Norway will host its biggest NATO maneuver in decades.

MOSCOW (Reuters) – German Foreign Minister Sigmar Gabriel on Thursday warned about the danger of a new arms race spiral with Russia and called on all sides to work to end the violence in eastern Ukraine as a first step towards broader disarmament efforts.

Gabriel used his first visit to Moscow as foreign minister to underscore his concerns about both Russia’s military buildup in the Baltic region and its western borders, as well as debate in Washington about “exorbitant military spending increases.”

Speaking to reporters after a meeting with Russian Foreign Minister Sergei Lavrov, Gabriel said they both agreed to continue four-way efforts by Germany, France, Russia and Ukraine to implement the Minsk peace process for Ukraine.

He said both sides in the conflict needed to implement measures already agreed, such as the withdrawal of heavy equipment from the line of conflict.

The conflict between Ukrainian forces and Russian-backed separatists in eastern Ukraine, which has already killed 10,000 people, has heated up in recent weeks.

Gabriel is a member of the Social Democrats, junior partners in Chancellor Angela Merkel’s ruling coalition and historic advocates of dialogue with Russia. But he said Moscow’s violation of sovereign borders in the middle of Europe was unacceptable, a reference to its 2014 annexation of Crimea.

Gabriel did not address Russia’s stationing of ballistic nuclear-capable missiles in Kaliningrad during the joint news conference with Lavrov. But he told Russian news agency Interfax on Wednesday that any move by Moscow to make that deployment permanent would be “a blow to European security.”

Some modifications of the Iskander-M missiles can hit targets 700 km (450 miles) away, putting Berlin within range of Kaliningrad.

“We urgently need new initiatives for peace and security,” Gabriel said on Thursday, adding that strategic and conventional disarmament remained a central tenet of German foreign policy.

“My concern is, given some debate on both sides, the large number of armed troops … in the Baltic states and Poland, and the debate in the United State about exorbitant increases in defense spending, that we are once again facing the danger of a new arms race spiral,” Gabriel said.

He said a military buildup like the one seen in the 1970s and 1980s was not in the interest of the people, noting that Russia, above all, should understand that lesson.

The German foreign minister said Germany had no knowledge about reported CIA hacking attacks carried out from the U.S. consulate in Germany. He added that Germany took any kind of influence operations aimed at affecting public opinion very seriously, regardless of their origin.

SOCHI, Russia (Reuters) – A ballistic missile defense shield which the United States has activated in Europe is a step to a new arms race, Russian President Vladimir Putin said on Friday, vowing to adjust budget spending to neutralize “emerging threats” to Russia.

The United States switched on the $800 million missile shield at a Soviet-era base in Romania on Thursday saying it was a defense against missiles from Iran and so-called rogue states.

But, speaking to top defense and military industry officials, Putin said the system was aimed at blunting Russia’s nuclear arsenal.

“This is not a defense system. This is part of U.S. nuclear strategic potential brought onto a periphery. In this case, Eastern Europe is such periphery,” Putin said.

“Until now, those taking such decisions have lived in calm, fairly well-off and in safety. Now, as these elements of ballistic missile defense are deployed, we are forced to think how to neutralize emerging threats to the Russian Federation,” he said.

Coupled with deployment in the Mediterranean of U.S. ships carrying Aegis missiles and other missile shield elements in Poland, the site in Romania was “yet another step to rock international security and start a new arms race”, he said.

Russia would not be drawn into this race. But it would continue re-arming its army and navy and spend the approved funds in a way that would “uphold the current strategic balance of forces”, he said.

U.S. Deputy Defense Secretary Robert Work said on Thursday that the shield would not be used against any future Russian missile threat.

Frank Rose, deputy U.S. assistant secretary of state for arms control, warned at the time that Iran’s ballistic missiles could hit parts of Europe, including Romania.

Putin said the prospect of a nuclear threat from Iran should no longer be taken seriously and was being used by Washington as an excuse to develop its missile shield in Europe.

The full defensive umbrella, when complete in 2018 after further development in Poland, will stretch from Greenland to the Azores.

It relies on radars to detect a ballistic missile launch into space. Sensors then measure the rocket’s trajectory and destroy it in space before it re-enters the earth’s atmosphere. The interceptors can be fired from ships or ground sites.